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USE OF
SOCIAL MEDIA FOR IMPROVING EXCELLENCE IN INSURANCE SERVICES

 

INTRODUCTION:

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Gone are the
days when product and information flow was from companies to market. The
vertical structure of marketing is not present anymore. In this era when
companies believe in collaborating with their stakeholders to bring changes in
their products and services the shift has changed from vertical to horizontal.
To put it in another way, market now has become inclusive rather than exclusive
as world is moving from hegemony to multilateral power structure. All of this
is because the customer is very well informed as digitalization stepped in. Customer
is the king now and digitalization serves as a great medium for information
search and creating awareness. Therefore, companies pay huge attention on their
customer base and prospects in order to deliver satisfaction at each step of
interaction. From generating leads to selling, onboarding and after sales
services, organizations incur huge cost in maintaining their relationship with
their customers.

On one hand
the customer is more informed now and the f- factors (friends, families,
Facebook fans and twitter followers) play a major role in shaping the buying
decision of a customer. Although on the other hand, despite higher level of
curiosity, they are not in control of what they want to buy. The customer is now
highly dependent on opinion of others. Social media is one such platform which
shapes the customers’ views about a product. Reviews, ratings and suggestions
are open for all to see due to which the sales of companies gets affected.
Negative and positive advocacy also creates a high impact in shaping a brand
image.

We can
categorize the customers in three parts. First are the ‘promoters’, these are
those customers who are highly satisfied with the product and thus provide
positive reviews and ratings on different social media and word of mouth.
Second are the ‘passives’, these are the neutral ones, those who don’t provide
any feedback whether they consumed the product or services or not. Third and
last are the ‘detractors’, they are very unlikely to recommend the brand to
anyone. From this we can infer that a customers’ satisfaction is very important
for an organization to flourish as the social media is a big world and nothing
is hidden from there.

There are
various tools through which a company can find out how well they are performing
and to what extent a customer is satisfied so that they would advocate
positively on different platforms. Through PAR (purchase action ratio) a
company can find out to what extent a company is successful in converting brand
awareness into brand purchase and BAR (brand advocacy ratio) helps them to
understand how successful they are in converting brand awareness into brand
advocacy. Thus, the outcome doesn’t take too long and companies’ can quickly
alter their decisions accordingly.

 

IMPORTANCE
OF CUSTOMER ENGAGEMENT:

During
investigations in 1990, Richhol and Saucer stated that reduction of customers
for 5%, results in loss of profit for 50% in the insurance companies. Based on
the researches, 5% increase in preserving the existing customers, will increase
the profit by 25-125 %.( source: International Journal of Economics and
Financial Issues, 2017, 7(3), 254-264). 

This survey
clearly shows that customer engagement is very important for the company’s
survival. The profit of an organization depends upon their customer’s response
to their products. In an industry like insurance where the whole industry is
customer centric, it is very important for an insurer to ensure that the
customer is treated right as he/she will be the face of the company and will do
positive advocacy.

Customer engagement is the direct route to every important
business objective. It’s the pathway to everything good that a business could
want: loyalty, purchases, profits and word of mouth advertising. Gallup research shows that a fully-engaged
customer represents 23% more revenue than average.

 A 2014 study by McKinsey & Company titled “The Digital Tipping
Point”, stated that C-level
business executives rate customer engagement as the top strategic priority for
all business initiatives.

 

When it
comes to customer engagement, insurers were at a bit disadvantage because
traditionally their roles restricted to sending renewal notice, a bill in the
mail etc. But because of the use of social media the insurer can use the medium
to engage with their customers better.

According to
another survey of insurance industry (USA) by KBM group, it was found out that
only about 4 in 10 (38%) customers are
strongly engaged, with an almost equal quantity (36%) moderately engaged—in
contrast to the remainder (27%) for whom their level of engagement is weak (see
Figure). These distinctions are significant, because it is those strongly
engaged customers who are most likely to be brand enthusiasts.

 

 

There are
various ways other than just renewal notices through which an insurer can
engage with their customers such as-

·        
Let
them know the ways to reduce their premium.

·        
Educate
them on various products and services.

·        
Help
them plan their financial future.

·        
Ask
them periodically about their life circumstances.

·        
Alert
insured’s about any potential issue that may affect their policy coverage.

·        
Provide
information and tips on how to minimize the risk etc.

Digital technology will help insurers a lot. Insurers have
the data about their target group, they can target specific group by
advertising online or by providing services to their existing customers online
and let them do the positive advocacy.

Over recent years, Social media have emerged as a new market
and a new way to interact with customers. Let us learn as to how social media
can be used by an insurer for different activities-

1-      By building a close link with your followers- An insurer can build a rapport with
their insured’s on social media and connect with them on a personal level which
they cannot do in traditional advertising. Having great number of followers
also creates a brand image which leads to great impact on customer’s mindset. Below
is the list of few leading Indian insurers and the number of followers of
different social media platforms.

 

NAME

FACEBOOK LIKES

TWITTER FOLLOWERS

LINKEDIN FOLLOWERS

YOUTUBE SUBSCRIBERS

1.     
LIC India
2.     
ICICI Lombard
3.     
HDFC Life
4.     
BAJAJ Allianz
General
5.     
Max Life
6.     
Reliance Gen.
7.     
IFFCO –Tokio
 
8.     
PnB Met Life
 
9.     
Royal Sundaram
10. 
TATA AIG
 
11. 
Star Health
 

6.5 million
623k
6.8 million
2.3 million
 
750k
72,283
147k
 
1million
 
343k
 
76K
 
100k

33.5k
13.8k
426k
13.9k
 
27.6k
9742
2916
 
78.8k
 
1369
 
241
 
3078
 

44,539
21,956
87452
210,446
 
60,787
15,773
6273
 
10,362
 
5426
 
18,872
 
6870

1631
4598
34,777
4567
 
17,682
2439
280
 
2831
 

 

 
1110
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2-      Make your followers feel special- Insurers can connect and engage with their followers in
order to make them feel special as a consumer or customer. For e.g. – HDFC Life
engages customers by posting different contests for followers to take part in.
Recently they posted a contest a 21 day challenge where the parents were asked
to take selfies with their children for 21 days to win vacations and cash
prizes. These type of activities keep customers engaged with the company.

 

3-     
Improve connection- By using social media, insurer can
connect and provide better service to the current insured. Lack of communication
can damage a company’s reputation. Quick and efficient response can be provided
through social media which will make customer realize that they are the asset
to the company and in return the brand image will improve along with the
ratings and reviews.

 

 

These benefits are for customers, so what is in it for the insurer. Let’s
take a look at the benefits of social media for insurer:

 

1-      Increase customer base- As the customer engagement increases and the grievance redressal
time decreases it lays a huge impact on customer’s mind due to which he/she
provides best ratings, better reviews and thus become positive advocate on
social media platforms.

 

2-      Reputation Building- When an insured treats their followers right and when the followers,
ratings and eventually reviews are getting better that’s when the insurer
starts building reputation which helps in strong brand image. For e.g. the new
insurance company ‘digits’ ask their user different ways on how to make their
service better and offer help through personalized messages.

 

3-      Cost- effective method- There is no denying the fact that traditional advertising
incurs much cost than on social media. Also, the insurer can choose their target
audience as per their database that saves a lot of to the company. With the
help of personal interaction with the followers, addressing their queries also
advertises the company’s goodwill and approachability.

 

4-      Less time and money on communication- While a person to person physical interaction is
time taking, interaction on social media is frictionless and less costly
affair. Sending mails, phone calls and letters take up a lot of time than a
personal interaction on any social media. Various companies like LIC, ICICI
Lombard, HDFC Life etc. addresses customers’ problem on social media and provide
solution quickly. In some way company’s become obligated to address the queries
as dodging them would hamper the brand image too.

 

 

As we have seen the impact of social media now we should
compare where Indian insurers stand as compared to foreign Insurers when it
comes to using social media for advertising and interaction with the customers.

Top insurance companies active on facebook are- AIG,
Prudential, AXA etc. Let us look at what practices these companies adopt to
attract large customer base. (Source: case study by talkwalker)

1-      AIG- Use goodwill campaigns to
improve customer engagement.

2-      Prudential: Use inspiring stories to
make content viral.

3-      MetLife: This Company faces a lot of
critical comments on facebook page because of lack of interaction on the
platform. Although, MetLife posts a lot which clearly indicates mere posting on
social media platform will not help the Company.

 

             Top Insurance Companies on
Twitter-

1-      ManuLife- Using essential Hashtags
and proactive community management by regular replying and retweeting.

2-      Zurich Insurance- By increasing
awareness and promoting social causes and sponsoring projects on social cause.

3-      GEICO- Strongest Performer in terms
of audience activity.

 

Thus we can observe that
Indian Insurers have a long way to go when it comes to social media engagement,
but as the country is moving towards digitalization, insurers will emerge with
it too.  Various global insurers hire
firms such as ‘Accenture Interactive’ to make their digital platform visible
and approachable so that the interaction between company and customer becomes
healthy. In order to make it successful ‘Accenture Interactive’ provides
various steps such as:

 

• Alert monitoring within
10 minutes of a social media comment or update.

• Sentiment analysis
using leading-edge Salesforce Radian6 and Social Studio tools to aggregate
Internet data and classify it according to agreed criteria and type of emotion
featured.

• Daily, weekly and
monthly theme analysis.

• Actionable insight and
“So what” analysis.

• Monthly competitor
analysis revealing rival content and engagement metrics to inform client
strategies.

• Spoof client account
identification and reporting.

• Influencer
identification and analysis. (Source: Accenture Interactive)

 

So, Indian Insurers can use such
method also to deliver quality service to their customers digitally. According
to another report released by an investment firm ‘Omidyar Networks’, an average
Indian spends 200 minutes on internet per day whereas in USA a person spends
300 minutes on internet per day. Although an average Indian spends 40% time on
Social Media whereas an American spends only 33% on social media. This shows
that it is the high time for an insurer to hit the rod as it is hot now. With
smart planning and strategies, Indian Insurer can definitely excel this field
and expand their customer base and as a result will contribute more to the
economy of the country. 

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